Syrah Resources Limited (ASX: SYR)

Production Rates at Balama Graphite Operations - Syrah Resources Limited is an Australian-based industrial minerals company. Syrah recently confirmed that its Balama Graphite Operation has continued progress on ramp up and optimisation throughout Q2 2018. The Group has planned a maintenance shutdown which was carried out over the May / June month-end and confirmed that the performance and condition of the dryers was positive following the fines dryer repair in April. It expected to materially improve flotation level sensor performance into the early part of the third quarter and further, with this kind of the level sensor issue, production of 160,000 tonnes for 2018 remains achievable. The Group continues its engagement with a broader range of Chinese and Brazilian experts to improve cell level management. The Group has well established security procedures, escalation protocols and crisis management plans and recently was awarded with ISO Certifications for Health, Safety and Environmental management systems for its Balama Graphite Operation. SYR’s strategy is focussed on value and is enabled by a world class deposit and fast growing market. Since the start of the year the share prices were down by 41.40 per cent and the stock price slipped by 1.78 per cent in the last five days as at 25 June 2018.The stock experienced a short interest of 21 per cent (as per the ASIC report of 19 June 2018.) We recommend to “Hold” the stock at the current market price of $2.73 as it is hovering around its 52-week low price ($2.43) amid challenges from the terror attacks which have not been far from its Balama project.
 

Safety Improvement Trend (Source: Company Reports)
 

JB Hi-Fi Limited (ASX: JBH)

Challenges due to increasing Competition- JB stores offer the world's leading brands of Computers, Tablets, TVs, Cameras, Speakers, Home Theatre, Portable Audio systems etc. The Group recorded total sales growth of 6.8 per cent for Q3FY18 (Q3 FY17: 10.8 per cent) and whereas The Good Guys sale was down 1.3 per cent (Q3 FY17: 2.6 per cent). The Company reaffirmed its FY18 sales guidance with total Group sales to be circa $6.85 billion (JB Hi-Fi $4.75 billion and The Good Guys $2.1 billion) and as a result it expects that it will be able to deliver NPAT of $230 million (previous guidance of $235 million to $240 million). Though JBH is aware of the challenges which it is going to face in the Home Appliance market as it will impact the Group’s performance in the short term but still the Board remains confident about its medium and long term outlook. It operates on a model that continuously makes investment in online platform and ensures that it give consumers choice on how to transact with JB HI-FI and The Good Guys (i.e. in store, mobile or desktop). Moreover, with Kogan’s entry in the Australian whitegoods and built-in kitchen appliance market, JBH moved a bit lower. Launch of Amazon is a big threat to the Group as it will be increasing the competition in the market. The stock prices have been moving in a downward direction since the start of the year and were down by 11.02 per cent in last three months as on 25 June 2018 but recovered slightly that is by 1.92 per cent in the last 5 days. 15.69 per cent of the shares were held short. The stock looks “Expensive” at the current market price of $23.08.


Cost of Doing Business (Source: Company Reports)
 

Domino’s Pizza Enterprises Limited (ASX: DMP)

Expansion plans ahead-  Domino’s has reaffirmed its full year guidance that was provided last year. However, it is expected that labour costs will be increased due to the implementation of strategic initiatives. The Group recently issued 274 fully paid ordinary shares for a consideration of$51.97 each under the terms of the Domino's Pizza Enterprises Limited Employee Share Acquisition Plan. Further, DMP is considered to have good technology platform while its efforts across other geographies like Europe are on track. European network sales increased €33.4m to €298.0m for H1 while Japan sales increased ¥289.3 million to ¥21,037.9 million. Lately, the Group announced that Australian employees will remain on the Fast Food Industry Award (Modern Award) and will not continue to pursue approval of a new Enterprise Bargaining Agreement. It is expanding its operations in European market as it sees an opportunity to double its global store network over the next seven years. The Company focuses on same-store sales growth (SSS). It was noted that in ANZ, SSS Growth was just 3.7 per cent in 1HFY18 and whereas in the first five weeks of 2HFY18, it was just 5.9 per cent and this disappointed the market which led the share prices slip. The stock climbed up by 19.56 per cent in last one month (as on 25 June 2018). However, given the price run-up and few shortcomings, it might be better to wait and watch out. The stock has experienced a short interest position of almost 15.41 per cent recently.


Total Network Sales Growth (Source: Company Reports)

 
Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.